New York Mets News, Opinions, and Hope for a World Series Victory

Tag Archives: Bernard Madoff

Citi Field with Shea Stadium's Home Run Apple (Photo credit: Wikipedia)

According to ESPN stats, attendance at Citi Field is down about 10% in 2012 through the first 19 home games. The Mets are averaging 27,683 paid per game. They finished 2011 averaging 30,108 in a park with a capacity of 42,000.

The Mets finished 2011 averaging 14th in MLB in home attendance. So far in 2012, they’ve slipped to 16th in the league.

Of course, much of attendance can be attributed to on-field performance. But the Mets have surprised early this season tied for third in the NL East and attendance is still slipping. The visiting opponents have a lot to do with interest in buying tickets as well. So far, the Mets have hosted the Braves, Nationals, Giants, Marlins, D-Backs, Brewers, and Reds.

The backlash against the Wilpons for the Madoff Ponzi scheme lawsuit also has something to do with fans staying away from Citi Field in my opinion. Allowing Jose Reyes to walk away in free agency because of related financial constraints didn’t help sway ticket buyers either.

It’ll be interesting to watch how attendance fluctuates this season. My guess is that the average game attendance continues to slide as the Mets begin to gravitate toward their predicted finish of an under-.500 team.

The Mets owners Fred Wilpon and Saul Katz were dealt a huge blow today in a New York court. The judge in the Madoff case against Wilpon and Katz agreed with the Madoff trustee and issued a partial summary judgement against the Mets owners. The judgement is for up to $83 million with the exact amount to be determined in the near future.

A trial will begin on March 19th if there isn’t a settlement before then. The trial will be over an additional $303 million that the trustee is going after based on his contention that the Mets owners willfully ignored information indicating that Madoff was running a shady operation.

There’s been a lot of speculation about whether Wilpon and Katz will be able to withstand this judgement and trial to hold onto ownership of the Mets. They’ve been cutting spending on the team drastically in an attempt to align spending with revenue in the last two years. Some might speculate that they’re reducing spending to stockpile cash in case of a negative outcome of the trial. Well, that first negative outcome happened today.

It’ll be interesting to see if there’s a settlement in the next couple of weeks or if this case goes to trial. Either way, I think Wilpon and Katz are on the run and trying to keep ownership of the Mets in any way possible. But it might not be enough. And that would probably be a good thing for fans at this point.

Mets owner Fred Wilpon filed papers with the Federal District Court in Manhattan attempting to avoid a jury trial against Irving Picard, the trustee for the Madoff victims. According to a report in the NY Times on Friday, the issue at hand is that the two remaining charges against Wilpon are generated from bankruptcy law according to Wilpon’s legal team. Generally, a bankruptcy case wouldn’t contain a jury component. The judge would render verdicts.

Wilpon and his legal team were emboldened by Judge Jed Rakoff dismissing nine of the eleven charges against Wilpon last month. So they want the same judge to render a verdict during a trial for the remaining two charges.

Picard filed a motion claiming that the victims of fraud in this case are entitled to a jury trial against the alleged perpetrators of fraud like Wilpon and his brother-in-law Saul Katz.

The Madoff fraud case is a stench that’s been hanging over the Mets for far too long. This is going to be the second offseason that the Mets have had to walk a financial tightrope when negotiating with free agents. Although the highest potential verdict against Wilpon in now $386 million instead of $1 billion, it still inhibits the Mets ability to re-sign Jose Reyes and negotiate with other free agents.

I’ve heard so many Mets fans tell me that they wish Wilpon would sell the team and go away. It’s hard to argue that point when the Mets are in the midst of one of the darkest periods in team history. At least the early 1960’s Mets had the excuse that they were an expansion team. The current crop of “stars” like Jason Bay are playing in a brand new park and still can’t draw a decent crowd. It’s a sad state of affairs for this team.

It looks like the Wilpons have won round 1 in a legal battle against Irving Picard.

According to Mark DeCambre of the New York Post, Picard dropped his damages claims against the Wilpons and Sterling Equities. DeCambre says that profits that were made by the Wilpons are being sought in bankruptcy court. DeCambre also says that Picard dropped the claim against the Wilpons because he was told that it won’t hold up in court without any evidence.

Adam Rubin of ESPN New York said on his twitter page that the Mets could now be liable for $300 million dollars instead of the original $1 billion dollar estimate back when this whole fiasco started.

This is good news for the Mets and the Wilpons. I know I am not an economic anaylst or expert, but this actually is good simply because the Wilpons will probably pay a lot less then what they would have paid (if the damage claim held up), and now the Mets will probably be less affected by this for the future to come.

The only other question in this whole saga is whether or not the Wilpons will be found guilty of making profits off of Madoff. If the Mets get away with that claim, the Mets will get their hands out of this mess, and (if a deal is in place) the new minority owner David Einhorn will be stuck as the minority owner. All in all, this is still good news. We’ll have to wait and see what happens in court.

Even CNNMoney is getting in on the Mets-Madoff story now. They correctly point out that the Mets’ financial situation could get more desperate quickly as their first player payroll is due on April 15 and debt payments come due not long after that.

There isn’t much in the video that we didn’t already know. But it’s interesting to see the Wilpon’s faces and tone of voice as they made a statement last month about the situation.

We also got a glimpse into what the Mets-owned SNY response would be last night during the opening game telecast. Clearly, Gary Cohen and Keith Hernandez were reading prepared statements about the Madoff lawsuit. Their prepared statements gave no indication of their true feelings, thoughts, or concerns about the situation. As employees of the Mets-owned TV station, I would expect nothing less if they want to keep their jobs.

Here’s this week’s video that I did Sunday night with Kerel Cooper of On The Black. We did this video before the official announcement of Oliver Perez’ release was made. We also talk about the release of Luis Castillo, Jason Bay’s comeback from injury, and the latest on the Madoff lawsuit.

Although Fred and Jeff Wilpon and Saul Katz are wealthy, they don’t know very much about investing their money or how it’s handled. At least that’s their story in a legal filing attempting to dismiss the Madoff trustee lawsuit against them for more than $1 billion.

The defendants have consistently stated that the trustee’s lawsuit is a work of fiction. But reading through the legal filing from the Mets owners tonight, I’d have to say that their side of the story doesn’t come across well.

I find it hard to believe that the Wilpons and Katz aren’t sophisticated investors and that’s the argument that they’re making. Anyone that controls billions of dollars makes it their business to be a sophisticated investor. Casting themselves as bumbling fools that happened to make more money than most people see in their lives is ridiculous.

The Mets owners need to get serious about settling this case. This stunt of a dismissal motion is nothing more than a PR tactic being used to try to fight the lawsuit through the media. If they don’t get serious about settling the case and solidifying their ownership position with the Mets, it’s going to continue to hurt the team in multiple ways. Notably, the players will have to continue to answer questions day after day about the team’s finances instead of the game on the field.

This “uncertainty” is going to continue as long as the owners continue to make statements like the following from Saul Katz:

“I don’t do well in the markets, the stock market,” Katz said. “I’m not good at it, it’s not my business. I don’t have an active account anywhere.”

Fred Wilpon was asked in a deposition if he knew how Madoff was able to make money investing:

“I’m not an investment person…so I wouldn’t have any kind of expertise.”

If this is the strategy that the Wilpons and Katz plan to employ, they’re in bigger trouble with this lawsuit than I thought they were. Playing dumb is never a good defense and for people that built an empire in New York it’s a really bad idea.

The New York Times revealed the existence of a $25 million loan from MLB to the Mets last November. Under pressure from a $1 billion lawsuit by the trustee for the Bernie Madoff Ponzi scheme, the Wilpons reached out to their old friend, MLB Commissioner Bud Selig, for a line of funding to keep the Mets operating for a short time.

The loan was so secret that Selig didn’t even tell the other owners that he was providing a bailout to the team one of the highest payrolls in the league and one of the priciest front offices as well. Selig finally told baseball’s executive committee in January about the existence of the loan. A Times reporter asked Fred Wilpon yesterday if he received financial assistance from MLB. Wilpon said he didn’t want to talk about team finances and dashed away quickly. When Wilpon was told that the Times found out about the secret loan, the team issued a brief statement to the media:

We said in October that we expected to have a short-term liquidity issue. To address this, we did receive a loan from Major League Baseball in November. Beyond that, we will not discuss the matter any further.

Last year MLB provided about $40 million in assistance to the Texas Rangers. That was because the owner and team were in bankruptcy. The loan that the Mets received isn’t far off in dollar value and is very telling about the state of the Mets finances compared to where the Rangers were last year.

The issue that concerns me is that the Wilpons haven’t been forthright, whatsoever, with the fans and the media about the real situation. Last year the Wilpons said the lawsuit didn’t have any financial impact on the operations of the Mets. It has. Last month the Wilpons admitted that they’re trying to find a minority investor in the team but there was no issue with operations. Last week the Wilpons arrived in Port St. Lucie and reiterated that the Mets had no financing problems.

The owners haven’t been forthcoming with the fans about the real situation with the team’s finances. Going forward, we have to take everything they reveal about the finances with a grain of salt. They’re being careful not to lie about it, but they’re certainly not talking about the true nature of the problem that this caused for the team.